By Jaspreet Kalra
MUMBAI (Reuters) – The Indian rupee closed nearly unchanged on Wednesday, wedged between the weakness in Asian currencies and broad-based interbank dollar sales that offered support to the local unit amid a weak global risk environment.
The rupee ended at 87.2075 against the U.S. dollar, almost flat compared to its close of 87.2125 in the previous session.
The dollar index nudged up to 103.5 while Asian currencies were down 0.1% to 0.4% as investors remained gripped by uncertainties surrounding global trade and growth from constant changes in U.S. tariff plans.
For instance, President Donald Trump reversed course on Tuesday afternoon on a pledge to double tariffs on steel and aluminium from Canada to 50%, just hours after announcing the higher tariffs.
The uncertainty has sapped risk appetite from financial markets and have contributed to pushing the S&P 500 index to the doorstep of correction territory.
“The dollar will likely be dictated by evidence on real economic conditions which will likely highlight the negative impact of uncertainty on U.S. companies and households,” MUFG Bank said in a note.
On the day, the rupee managed to hold its ground, aided by interbank dollar sales that traders estimated were spurred by exporter activity and mild dollar inflows.
The focus now turns to local and U.S. consumer inflation data which is expected to influence rate cut trajectories of the countries’ respective central banks.
India’s consumer price index is forecast to have eased to 3.98%, while month-on-month U.S. core CPI likely dipped to 0.3% in February, according to Reuters polls.
Traders are currently pricing in little over three 25-bp rate cuts by the Federal Reserve this year while consensus estimates suggest that the Reserve Bank of India will cut rates by an additional 50 bps over the remainder of 2025.
(Reporting by Jaspreet Kalra; Editing by Janane Venkatraman)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibility for its content.
